As
Democrats and Republicans continue to heap abuse on one another in
Washington, the U.S. corporate tax base continues to show signs of
erosion. Under what is shorthanded as an “inversion,” U.S. companies bed
down with a foreign partner or takeover target, and live happily ever
after, domiciled in a tax friendlier jurisdiction like Britain, Ireland
or even Canada.
In the latest headline-grabbing inversion deal
Miami-based Burger King will absorb Tim Hortons, a Canadian coffee and
doughnut chain, to create what will be the world’s third-largest fast
food global corporation, with more then 18,000 restaurants in 100
countries with $23 billion in annual sales revenue.
Back in 2010
Burger King was bought by 3G Capital, a global investment firm, led by
75-year-old Brazilian-Swiss billionaire Jorge Paulo Lemann. Lemann, a
Harvard graduate, former journalist and tennis star is ranked by
Bloomberg as the 28th wealthiest man in the world, worth about $25.2 billion.
Back in 2008 Lemann and his team put together a $52 billion deal to buy out Anheuser- Busch, the iconic American beer brand.
Just
four years earlier they had parlayed their ownership of Brazilian beer
brands Brahma and Antarctica, which dominated South America, into
becoming a global player with their takeover of Belgium-based
Interbrew, makers of premium brands like Stella and Becks. From there it
was just a hop, skip and a multibillion-dollar jump to global beer
domination.
Today the world’s largest beer conglomerate is
publicly traded as AbInBev. It has 200 beer brands with 150,000
employees based in 24 countries bringing in $40 billion in annual revenue. On
its recruiting website a company video says its “dream is to be the
best beer company in a better world. Better world is the way AbInBev
gives substance to corporate social responsibility. Making a positive
contribution to the world around us is crucial if we want our business
to be sustainable and profitable in the long run.”
Lemann’s
Anheuser Busch conquest was not without controversy and some patriotic
hand-wringing over the globalizing of a brand like Budweiser that more
than just about any other had wrapped itself up in America’s sovereign
“red, white and blue.” But at $70 a share price offer, there was enough
green for stockholders and the Busch family to resign themselves to this
new world beer order. The consensus of the business press was that the
Anheuser Busch leadership had become complacent and vulnerable to a
takeover by Lemann’s A team of cost cutters, who once in control, zeroed
out free beer and fancy corporate travel.